What’s Mexico’s Best Hope for Growth?

NAFTA was “oversold,” says Mexico’s former secretary of foreign affairs. The country can only revive its economy by fundamentally altering its neighbors’ thinking.
  • Transcript


Question: Has NAFTA been beneficial or harmful to Mexico’s economy?

Jorge Castañeda:  Well, NAFTA was oversold from the very beginning.  It was oversold by its advocates as being the sort of the silver bullet that would solve Mexican underdevelopment and it was oversold by its critics who - you remember Ross Perot’s huge sucking sound that millions of jobs would flow from the United States to Mexico.  I wish they had.  That’s exactly what we need.  But, that didn’t happen.  So, it was oversold from the very beginning and consequently it’s easy right now to blame NAFTA or to praise NAFTA for Mexico’s ills or for Mexico’s successes.

In fact, I have the feeling it hasn’t done that much harm.  This notion that millions of peasants were driven off the land by NAFTA is false.  Peasants in Mexico have been being driven off the land for decades now and, as a matter of fact, there should be fewer peasants in Mexico today then there are with or without NAFTA.  Mexico is a country who where by GDP per capita it should have far few people working in agriculture than it does. 

Conversely, it has not done the country that much good either.  The Mexican economy has only grown an average of around 3 percent per year, a little bit less, since 1994 when NAFTA came into law which is really not very impressive and it’s way below what was expected of NAFTA.  So, I think too much has been made of the whole thing.  As it stands, it’s okay, but it’s not such a big deal.

Question: How can Mexico raise its standard of living over the long term?

Jorge Castañeda:  Well, there's a lot things that it has to do.  Has to do things on energy, on the rule of law, on tourism, on all sorts of things.  But, at the end of the day, the one most important thing that it has to do is to convince itself and the United States and Canada that Mexican economic development and prosperity is the number one issue on the US and on the Canadian agenda with Mexico.  That the number one issue is not drugs; the number one issue is immigration only indirectly.  The number one issue is not the environment, etc.  The number one is how the United States and Canada with Mexico can drag Mexico up by its bootstraps and turn it into a more prosperous country. 

This is not something that outrageous for the United States.  It’s what the United States did with Puerto Rico in the 1940’s.  It’s, of course, what it did with Western Europe through the Marshall Plan.  It’s what it did with Japan and Taiwan during the 50’s and 60’s.  It’s what the Western European countries, the rich northern Western European countries like France and Germany and Britain, did with the poorer countries like Ireland or Spain or Portugal or Greece or now with Poland.

If you're interested in having neighbors that are further up in the income scale, make you more competitive, make you more secure, make better friends, you have to get involved in doing so.  This notion that this is just Mexico’s business is not accurate.  It doesn’t work that way because we share a 2000 mile border, because 10 percent of Mexico’s inhabitants live in the United States, because 90 percent of our trade is with the United States.  There are a million American residents in Mexico, more than in any other country in the world.  You can’t just say, “Well, that’s a Mexican problem.”  But, we have to convince the United States that that’s the way it is and we have to convince ourselves that that’s the way it is.

Recorded on February 1, 2010
Interviewed by Austin Allen